Q24N (The Diplomat) Although Costa Rica has recognized Beijing as its diplomatic partner since 2007, the regional avalanche in favor of China truly began with Panama in 2017, followed by El Salvador in 2018, Nicaragua in 2021, and Honduras in 2023.
The rapprochements between Central American nations and China were accompanied by grandiose narratives disseminated by officials and propaganda apparatuses on both sides, continually alluding to opportunities and benefits, with symbolic gifts ranging from stadiums to amusement parks.
In reality, these relations between Central American countries and China have, within a few years, resulted in a huge trade deficit, failed projects and a marked lack of transparency in Beijing’s relations with the corrupt elites of countries with authoritarian leaders. Meanwhile, the expected financial windfalls have failed to materialize.
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Chinese foreign direct investment (FDI) in Central America represented only 0.34 percent of the total received by the region between 2000 and 2016, before the recent wave of diplomatic normalization. From 2010 to 2021, according to the Central American Monetary Council, Chinese FDI barely represented 0.3 percent of the total received in the period. In other words, the relative share of Chinese FDI in Central America actually dropped despite four countries cementing new ties with Beijing.
The 2023 Monitor of FDI Outflows from China in Latin America and the Caribbean found that of 600 registered investments (worth $184.6 billion) that Chinese entities made in Latin America and the Caribbean between 2000 and 2022, only 17 (worth $1.5 billion) were in Central America.
Despite the small amount of investment, the projects that have materialized have been plagued by irregularities. For example, in Costa Rica, a promised refinery was not built and a highway linking the capital, San José, with the Caribbean has not been completed after a decade.
Politically and diplomatically, the Chinese government presents itself as a power without hegemonic pretensions; as a cooperative partner and a promoter of international peace and a new multipolar world order. In addition, it claims to be a trading partner that does not impose conditions as well as a responsible and reliable international actor. However, like any other nation, China mobilizes its foreign policy guided by its strategic interests.
For Central America, China’s goals center on taking Taiwan out of the region. Central America was of interest to China because in this region, until not many years ago, Taiwan enjoyed international recognition and support. But that has already changed.
What remains, however, is Beijing’s support for authoritarian projects such as in Nicaragua, El Salvador, and Honduras, which represent a risk not only to the democratic and economic stability of the region, but also to the hemisphere.
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Nicaragua has sought backing to circumvent international norms in terms of democratic practices and human rights, while El Salvador and Honduras feel support for their populist environments.
The risks for weak democracies are increased by the institutional weaknesses of Nicaragua, Honduras, and El Salvador, which are being exploited by China to reach agreements that allow investments. These agreements are made under confidential terms and come with onerous interest rates that only favor interest groups connected to corrupt circles of power.
Regarding China’s cooperation with Central America, the results can be considered mixed. With Chinese sponsorship, Central American governments have been able to promote various works, especially infrastructure projects, that are usually highly publicized. However, the truth is that such cooperation is done in opaque terms, even contradicting the official narratives that Chinese cooperation come “without strings attached,” as Salvadoran President Nayib Bukele put it.
The design of Chinese-funded projects is also questionable. The technical criteria behind them and their execution are carried out without the possibility of being audited by public institutions, the independent press, and civil society.
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The digital media Expediente Público has documented the presence in Central America of a variety of Chinese companies with notable records of corruption and bad practices in other Latin American countries and Africa.
In addition, Expediente Público has begun to document the effects of Chinese Communist Party operations on regional governance. These relations have been characterized by conditioning Central American foreign policy to their interests. China fosters opaque bilateral relations and uses its propaganda apparatus to promote disinformation for the benefit of its strategic objectives in the region.
These aspects are analyzed in greater depth in the recent Spanish-language publication of Expediente Abierto, entitled “China in Central America: Strategies, Influence and Operations in the 21st Century.”
This study offers a comprehensive view of China’s interests, strategies, and operations in Central America, examining its pernicious influence on matters of the economy, cooperation, and governance in the region, as well as suggesting alternatives to civil society, aid workers, businessmen, and governments for a better future of these relations.
The above arguments, far from suggesting a rupture with China, advocate the urgent need to analyze and rethink Sino-Central American relations from the pragmatism of realpolitik. This rethinking could guarantee better results than those achieved so far for the region.
To this end, it is a sine qua non condition to recognize that China is a power that pursues strategic interests and that, to achieve them, it will not hesitate to make use of diplomatic, economic, and media tools. Many of these tools will undoubtedly clash with the interests of China’s own allies.
Source: Thediplomat.com
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